Building an entrepreneurial society

Archive for the month “December, 2011”

What is all this talk about innovation? Usually just talk.

A recent Globe and Mail article questioned the over use of the word Innovation and how it is at risk of becoming a meaningless term.  You can’t escape the buzz that we need more innovation.  People need to be innovative and so do governments, businesses, cities and even countries.  There are task forces created to determine how we can become more innovative.  Yet the term is so broad that it is almost useless in helping us to take action.

Read a government report on innovation and you see the same suggestions – more people should study science or engineering, put more emphasis on math in schools, reduce taxes, provide more venture funding or more government incentives.  The list goes on but you can almost change the author’s name and leave the report the same. Corporate executives talk about the need to become more innovative as if that wasn’t something they should have been doing all along.

Innovation is one of those terms like quality and sustainability that corporate and government leaders like to toss around to make it appears as if they are out there leading the charge.  The terms are sufficiently ambiguous that they can’t be called to task for not having delivered since no one actually knows what was being promised.

What we need are businesses that produce products and deliver services that people are willing to buy.  They need to sell for more than they cost to deliver without the benefit of subsidies or grants.  They have to be able to be competitive against other products and services to make sure that there is constant improvement and people get the best that business can produce.  This ongoing drive to serve paying customers and make a profit or provide a social benefit is what innovation is about.  Companies that do this on a consistent basis are the innovative ones not the ones that just talk about it.

What is the role of large companies in an entrepreneurial society

Throughout the lives of most of us large companies have dominated the economy.  They have employed the most people, produced the most goods and services and have had the greatest influence.  In recent years, though they are still dominant, there are signs of ineffectiveness in the these organizations.  They are not flexible in their approach and are often taken down by emerging technologies.  Their political influence often seems more detrimenental to society than beneficials.  Most people I know don’t trust them and few want to work for them.  So what is their role in a world that needs more innovation and entrepreneurship?

Is it possible for an economy to flourish when made up of a smaller number of large companies and a multitude of small ones?  Will these small companies work in a sort of eco system where a large company sits at the center surrounded by a network of small entities?  Alternatively will the small companies serve as acquisition targets for large companies that can’t invent things on their own?

If we are heading into a world of slower growth large companies may not have the environment they need to keep growing.  Depending on what you believe about the supply of fossil fuels we may also be looking at a more localized world.  This could be a world that is dominated by small companies without the need for large entities.

Do all small companies aspire to grow into large ones?  If a company stops growing or trying to grow will it stagnate or decline or is a steady state possible?  With the technology that exists today we could see an evolving network of small companies that accomplish what larger ones used to do.  However this network should be more responsive to change and hopefully more sensitive to people and society.

I ask these things because we tend to get caught up in thinking that the world will be much in the same in the future as it has been in the past.  I hear that more younger people want to start their own businesses rather than work for large ones.  I also meet alot of boomers that are ready to step away from the big company world and strike out on their own.  If these trends do transpire and people no longer see large companies as desirable places to work then they will need to respond to that or see their role diminished.

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